Brownfield Redevelopment Discussion

Peter Anastor

Michigan Economic Development Corporation

www.themedc.org

www.michiganadvantage.org

Brownfield TIF Changes

• Use of School Tax Capture extended to December 31, 2012

• Demolition and Lead & Asbestos Abatement Available Statewide

• Funds Available for Local Administration Increased from $75,000.

• Large Credits

– 11 projects, $1.3 billion investment

• Small Credits

– 27 projects, $156 million investment

• Mini Credits

– 12 projects, $15 million investment

Brownfield MBT 2007 Review

• Brownfield Redevelopment Tax Credits included in new Michigan Business Tax

• Section 437 of Michigan Business Tax

• PA 36 of 2007, Senate Bill 94

Brownfield MBT

• These changes are not signed into law.• Included in HB 5511, which has passed

the House.• Currently in Senate Economic

Development and Regulatory Reform Committee

PROPOSED CHANGES

Brownfield MBT

Refundable Brownfield Tax Credit

– Credits that exceed a qualified taxpayers liability would be refunded at 75% of the amount that exceeds the liability

Brownfield MBT

Increase Tax Credit Percentage– Increase Tax Credit to 12.5% of the Eligible

Investment

Increase Program Efficiency– Limit eligible investment to project hard

costs

Brownfield MBT

Brownfield MBT

Original 10%• $50,000 investment

– $20,000 exterior– $10,000 interior– $10,000 machinery– $10,000 soft costs

• $50,000 Eligible Inv. • Total credit = $5,000

New 12.5%• $50,000 investment

– $20,000 exterior– $10,000 interior– $10,000 machinery– $10,000 soft costs

(not eligible)

• $40,000 Eligible Inv.• Total credit = $5,000

Urban Redevelopment

– Up to 15% Tax Credit for Urban Development Area Projects

– Urban Development Area Projects include Downtowns or traditional historic commerce centers of Qualified Local Units of Government

Brownfield MBT

Urban Development Area Projects

– Increases Density– Promotes Mixed-Use Development– Promotes Sustainable Development– Addresses Area Wide Redevelopment– Addresses Underserved Markets of

Commerce

Brownfield MBT

Additional Changes

– Increases Number of Large Credits to 20– Combines “Small” and “Mini” Allocation into

one $40 million allocation– Allows for Assignments of Tax Credits for

Projects Approved under MBT– ???

Brownfield MBT

Brownfield Redevelopment Challenges

• What Challenges Remain?

• What Else Can We Do to Stimulate Brownfield Reinvestment?

National Brownfield Conference

May 5-7, Cobo Center, Detroit

www.brownfields2008.org

Brownfield Training

Peter Anastor

517-373-9014anastorp1@michigan.org

Joe Martin

517-241-8378martinj11@michigan.org

Contact